FCA bans hedge fund manager

A former city hedge fund manager who defrauded clients of £349m has been banned by the FCA from performing any regulated financial services activity.

On 19 January, Magnus Michael Peterson, who was the head of the hedge fund Weavering Macro Fixed Income fund, was convicted of fraud following an investigation by the Serious Fraud Office after client losses of around $536m (£349m).

Peterson was then sentenced on 23 January to a total of 13 years’ imprisonment at Southwark Crown Court.

The investigation centred around interest rate swap trades between the Weavering Macro Fund and Weavering Capital Fund, two offshore companies owned and controlled by Peterson.

The SFO said the investment performance of the Macro Fund presented to investors was inflated due to these swap trades, and its dependence on bad debt generated by the trades bought it to the point of collapse in March 2009.

FCA director of enforcement and market oversight Mark Steward says: “Mr Peterson defrauded investors who should have been able to trust him.

“Over a prolonged period he purposely used investors’ money to prop up his business, and then lied in order to cover up his deception. To protect consumers and markets we have banned Mr Peterson from working in financial services.”